UNION OF INDIA AND OTHERS versus M. V. MOHANAN NAIR on 5 March 2020

UNION OF INDIA AND OTHERS

v.

M. V. MOHANAN NAIR

(Civil Appeal No. 2016 of 2020)

MARCH 05, 2020

[R. BANUMATHI, A. S. BOPANNA ANDHRISHIKESH ROY, JJ.]

Service Law – Modified Assured Career Progression (MACP)Scheme vis-à-vis Assured Career Progression (ACP) Scheme – ACPScheme was withdrawn and superseded by MACP Scheme –Respondents given beneficial pay upgradation as per MACPScheme, however claimed the benefit of Grade Pay of the nextpromotional hierarchy following the erstwhile ACP Scheme –Granted by different Benches of CAT relying upon Union of India v.Raj Pal – Challenged by appellants – Dismissed by High Courts –On appeal, held: Though ACP and MACP Schemes are intended toprovide relief against stagnation, both have different features –MACP Scheme was recommended by Sixth Central Pay Commissionto bring systematic changes in the existing ACP Scheme so that allemployees irrespective of existing hierarchical structure in theirorganisations/cadre get the same benefit – Words used in the MACPScheme are “placement in the immediate next higher Grade Pay inthe hierarchy of the recommended revised pay bands” – Term “GradePay in the next promotional post” is conspicuously absent in theentire body of the MACP Scheme – Respondents’ contention thatthe benefit of MACP Scheme is referable to the promotional post, isde hors the MACP Scheme – When the expert body like PayCommission comprehensively examined all the issues, variousrepresentations and the disparities, the court should not interferewith its recommendations – MACP Scheme has not been challengedby the respondents – Further, Raj Pal’s case was dismissed by theSupreme Court on technical ground without any decision on meritsand thus could not have been taken as a precedent – No groundsmade out to show that the MACP Scheme granting financialupgradation in the next grade pay is arbitrary – Impugned ordersset aside – Constitution of India – Art.141 – First Schedule of CentralCivil Services (CCS) (Revised Pay) Rules, 2008.

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Service Law – Assured Career Progression (ACP) Scheme andModified Assured Career Progression (MACP) Scheme – Distinctionbetween – Discussed.

Constitution of India – Art.141 – ‘Law’ under – Held: Lawdeclared by the Supreme Court is a principle laid down by the courtBand it is this principle which has the effect of a precedent – Aprinciple is a proposition delivered after examination of the matteron merits – Service Law.

Service Law – Modified Assured Career Progression (MACP)Scheme – Object and salient features of – Discussed.

CDisposing of the appeals, the Court

Conclusion

HELD: 1.1 In order to bring systematic changes in theexisting scheme of ACP so that all employees irrespective ofexisting hierarchical structure in their organisations/cadre getthe same benefit, MACP was recommended by the Sixth CentralDPay Commission. Both ACP and MACP Schemes are in the natureof incentive schemes devised with the object of ensuring thatthe employees who are unable to avail of adequate promotionalopportunities, get some relief from stagnation in the form offinancial benefits. Under the MACP Scheme, financialEupgradations are granted at three regular intervals on completionof 10-20-30 years of service without promotion. Hence, it is alsointended to ensure that the employees are adequately incentivisedto work efficiently despite not getting promotion for want ofpromotional avenue. The change in policy brought about bysupersession of the ACP Scheme with the MACP Scheme is afterFwell-deliberated and well-documented recommendations of theSixth Central Pay Commission. Considering the various issuesin the implementation of the ACP Scheme, the Pay Commissionexpressed its views “the only other way is to bring systematicchanges in the existing Scheme of ACP so that all the employeesGirrespective of the existing hierarchy structure in theirorganisations/cadres, get some benefit under it”. The Commissiontherefore, recommended that the existing Scheme of ACP becontinued with the modifications indicated thereon in the Reportthat the financial upgradation has to be in the next immediateGrade Pay. One of the reasons for the expert body recommendingH

the MACP Scheme was that there were inter-departmentaldisparities where several departments had varying promotionalhierarchies. As a result, the working of ACP Scheme under whichan employee who stagnated for 12 years, was entitled to pay inthe Pay Scale of the next promotional post, led to inter-departmental anomalies. The Pay Commission therefore,recommended MACP Scheme with a view to putting an end tothe problem ensuing from inter-departmental disparities.[Paras 9, 26][861-F-H; 871-G-H; 872-A]

1.2 In the ACP Scheme, there was no Grade Pay but onlyfixed Pay Scales and fixed increments. After the Sixth CentralPay Commission, various Pay Scales have been clubbed togetherand there is revised Pay Scale with corresponding Pay Bandsand corresponding Grade Pay. The norms for grant of ACP werestringent and the government servant has to satisfy the normsfor promotion. Whereas under the MACP Scheme, for financialupgradation, the rigour of screening is diluted. [Para 18][868-A-B]

1.3 The words used in the MACP Scheme are “placementin the immediate next higher Grade Pay in the hierarchy of therecommended revised pay bands”. The term “Grade Pay in thenext promotional post” is conspicuously absent in the entire bodyof the MACP Scheme. The argument of the respondents that thebenefit of MACP Scheme is referable to the promotional post, isde hors the MACP Scheme and cannot be accepted. Though ACPand MACP Schemes are intended to provide relief againststagnation, both the Schemes have different features. Pay scalesunder the Sixth Pay Commission and the MACP Scheme arestated to be more beneficial since it extends to the employeeswith time intervals with higher pay bands and various facilitieswhich were not available under the ACP Scheme including thethree financial upgradations in shorter time span. In any event,MACP Scheme has not been challenged by the respondents. Therespondents cannot be permitted to cherry-pick beneficialfeatures from the erstwhile ACP Scheme and also take advantageof the beneficial features in the MACP Scheme. [Para 27][872-C-E]

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A1.4 The object behind the MACP Scheme is to provide reliefagainst the stagnation. If the arguments of the respondents areto be accepted, they would be entitled to be paid in accordancewith the grade pay offered to a promotee; but yet not assume theresponsibilities of a promotee. If the employees are entitled toenjoy Grade Pay in the next promotional hierarchy, without theBcommensurate responsibilities as a matter of routine, it wouldhave an adverse impact on the efficiency of administration. Afteraccepting the recommendation of the Sixth Central PayCommission, the ACP Scheme was withdrawn and the same wassuperseded by the MACP Scheme with effect from 01.09.2008.This is not some random exercise unilaterally done by theCGovernment, rather, it is based on the opinion of the expert body– Sixth Central Pay Commission. When the expert body like PayCommission has comprehensively examined all the issues andrepresentations and also took note of inter-departmentaldisparities owing to varying promotional hierarchies, the courtDshould not interfere with the recommendations of the expert body.When the government has accepted the recommendation of thePay Commission and has also implemented those, anyinterference by the court would have a serious impact on thepublic exchequer. In the present batch of cases where therespondents are claiming financial upgradation in the grade payEof promotional hierarchy, no grounds are made out to show thatthe MACP Scheme granting financial upgradation in the next gradepay is arbitrary and unjust; warranting interference. [Paras 28,29 and 35][872-F-H; 873-B-D; 875-G-H]

2.1 In the case of Raj Pal, the post of Photocopier, being anFisolated post, the order was passed in the peculiar facts andcircumstances of the case. Rajpal’s case did not go into any detailsin respect of the overall features of the new MACP Scheme anddid not consider the recommendations of the expert body whichculminated in the new Scheme. Raj Pal’s case having beendismissed on the ground that no sufficient cause was shown forGthe delay in refiling, Raj Pal’s case ought not to have been quotedas precedent of this Court by the High Courts. [Paras 42, 45][879-B, C, F; 881-B]

Union of India v. Raj Pal Decision of Supreme Courtdated 15.04.2013 in SLP (C) No. CC 7467 of 2013 –Hdistinguished.

2.2 Article 141 of the Constitution of India provides thatthe law declared by the Supreme Court shall be binding on allcourts within the territory of India, i.e. the pronouncement of thelaw on the point shall operate as a binding precedent on all courtswithin India. Law declared by the Supreme Court has to beessentially understood as a principle laid down by the court andit is this principle which has the effect of a precedent. A principleas understood from the word itself is a proposition which canonly be delivered after examination of the matter on merits. Itcan never be in a summary manner, much less be rendered in adecision delivered on technical grounds, without entering intothe merits at all. A decision, unaccompanied by reasons can neverbe said to be a law declared by the Supreme Court though it willbind the parties inter-se in drawing the curtain on the litigation.Without considering the advantages in the MACP Scheme, theHigh Courts erred in interfering with the government’s policy inaccepting the recommendations of the Sixth Central PayCommission by simply placing reliance upon Raj Pal’s case. Sincecertain anomalies on implementation of the MACP Scheme havebeen brought to the notice of the Joint Committee in the variousmeetings of the Joint Committee, Union of India and DoP&T toconsider the same as they deem it appropriate and take a decisionin accordance with law. [Paras 44, 51 and 53][879-G-H; 880-A-B;883-D-E; G-H]

Union of India and Another v. P.V. Hariharan andAnother (1997) 3 SCC 568 : [1997] 2 SCR 1050; Stateof U.P. and Others v. U.P. Sales Tax Officers Grade IIAssociation (2003) 6 SCC 250; Secretary, Government(NCT of Delhi) and Others v. Grade-1 OfficersAssociation and Others (2014) 13 SCC 296 : [2014] 8SCR 976; State of Tamil Nadu v. S. Arumugham (1998)2 SCC 198 : [1997] 5 Suppl. SCR 295; State of Haryanaand Another v. Haryana Civil Secretariat Personal StaffAssociation (2002) 6 SCC 72 : [2002] 1 Suppl. SCR118; Union of India v. All India Service Pensioners’Association and Another (1988) 2 SCC 580 : [1988] 2SCR 697; Supreme Court Employees Welfare Associationv. Union of India and Others (1989) 4 SCC 187 : [1989]3 SCR 488 – relied on.

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Case Law Reference

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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2016of 2020.

From the Judgment and Order dated 24.06.2013 of the High Court Dof Kerala at Ernakulam in OA (CAT) No. 2000 of 2013.

With

Civil Appeal Nos. 2017, 2018, 2019, 2020, 2021, 2022 and 2044-2045 of 2020.

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A.N.S. Nadkarni, ASG, Ms. Madhvi Divan, Dr. Kailash Vasdev,Jaideep Gupta, (A.C.), Vinay Kumar Garg, Sr. Advs., Kunal Chatterji,Pravar Veer Mishra, Ms. Priyanka Das, Raj Bahadur Yadav, AkshayAmritanshu, Anish Kr. Gupta, Pranay Ranjan, S.K. Gupta, SumitUpadhyay, Ms. Rekha Pandey, Arvind Kumar Sharma, S.S. Ray, VijayFPrakash, B.V. Balram Das, Ms. Alka Agarwal, Baldev Atrey, B. KrishnaPrasad, Gurmeet Singh Makker, Sahil Monga, Mrs. Anil Katiyar,Ms. Priya Mishra, Arun Kumar Yadav, Surender Kumar Gupta, MukeshKumar Maroria, Shubham Saurav, Ms. Rekha Pandey, Ms. Vimla Sinha,Rajeev Sharma, Sahil Bhalaik, Tushar Giri, Pradeep Kr. Mittal,GMs. Shivetima D., Ms. Simanta Kr., Saurabh Kr., Raj Kishor Choudhary,K. Rajeev, O. P. Bhadani, C. K. Sasi, Nayantara Roy, Abdulla N.,Ms. Somya Gupta, P.A. Kulkarni, Ms. Punam Kumari, Yatindra Sharma,Prashant Kumar, G. Umapathy, Ms. Vaishnavi, Rakesh K. Sharma, G.Tushar Rao, Mayank Sharma, Kumar Dushyant Singh, Ms. Pavitra, D.K.Thakur, Devendra Jha, Shivaraju H.B., Rituparn Uniyal, Abhishek Kumar, H

for Debasis Misra, Mrs. Prabha Swami, Nikhil Swami, Ms. Divya Swami,Naveen R. Nath, Rahul Jain, A. N. Arora, Ms. Sumita Hazarika,Ms. Ipsita Behura, Sunil Kumar Jain, M. B. Ramasubba Raju, E.P.Gopinathan, Ms. Megha, Balaji Srinivasan, R.S. Rajiv, Mohan Kumar,Manoj V. George, Ms. Shilpa Liza George, K.M. Vignesh Ram,Ms. Bhavika, Zulfiker Ali P.S., Chava Badri Nath Babu, RameshwarPrasad Goyal, C.M. Angadi, M.K. Bhardwaj, Akash Dahiya, SatishKumar, G. Prakash, Jishnu M.L., Ms. Priyanka Prakash, Ms. BeenaPrakash, M. K. Dua, Sudhir Naagar, Karamveer Singh, Sidharth Khatana,Ms. Haripriya Padhmanabhan, Ms. Pooja Dhar, Shrutanjaya Bhardwaj,Ms. Gayatri Verma, Vishal Sinha, Ms. Beena Goyal, Hitesh KumarSharma, Akhileshwar Jha, Ms. Meenakshi Gupta, B.P. Singh, Ms. KusumChaudhry, Gp.Capt. Karan Singh Bhati, Ms. Kirti Khangarot, Ms. CelesteAgarwal, Ms. Oorjasvi Goswami, Advs. for the appearing parties.

The Judgment of the Court was delivered by

R. BANUMATHI, J.

1. Leave granted.

2. The instant batch of appeals have been filed assailing the ordersof various High Courts dismissing petitions filed by the appellants, therebyupholding decisions rendered by different Benches of CentralAdministrative Tribunal granting financial upgradation of grade pay inthe next promotional hierarchy by placing reliance upon Union of Indiaand others v. Raj Pal and another CWP No.19387 of 2011dated 19.10.2011. In these batch matters, we are concerned with thequestion whether MACP Scheme entitles financial upgradation to thenext grade pay or to the grade pay of the next promotional hierarchy.

3. In all these appeals, almost all the High Courts have followedthe Raj Pal and Ved Prakash’s case and granted relief as prayed for bythe respondents. Being aggrieved, the appellant-UOI has filed theseappeals.

4. The main questions falling for consideration in these appealsare:-

(i) Whether MACP scheme entitles financial upgradation ofpay to the next grade pay or to the grade pay of the next A

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Apromotional post as envisaged under the ACP scheme?Whether MACP Scheme envisages grant of financialupgradation in Grade Pay Hierarchy and not in promotionalhierarchy?

(ii) As contended by the respondents, whether MACP schemeBis disadvantageous to the employees in comparison to ACPscheme as long as the financial upgradation is granted inhierarchy of grade pay under MACP scheme?

(iii) Whether respondents are entitled to stepping up of theirgrade pay to be at par with grade pay of their juniors whoCwere getting the higher grade pay on account ofimplementation of MACP Scheme?

Appeals relating to Issue No.III were ordered to be de-taggedand listed separately.

5. At the outset, it is to be pointed out that almost all the Tribunals/DHigh Courts have only relied upon Raj Pal’s case for grant of financialupgradation on promotional hierarchy and rejected the stand of theappellant-UOI that under MACP scheme, the employees are entitled tofinancial upgradation of the next grade pay only. Since the matter wasconsidered on merits and since the issue involves impact on the publicEex-chequer and also interest of the staff of various establishments, werequested learned Senior counsel, Mr. Jaideep Gupta to assist the Courtas amicus curiae which the learned Senior counsel has readily consented.Mr. Kunal Chatterji, learned counsel has agreed to assist the learnedSenior counsel-amicus.-FAssured Career Progression (ACP) Scheme:

6. The Government of India with a view to “deal with the problemof genuine stagnation and hardship faced by the employees due to lackof adequate promotional avenues”, introduced the Assured CareerProgression (ACP) Scheme with effect from 09.08.1999 vide its OfficeGMemorandum dated 09.08.1999. To mitigate the hardship in cases ofacute stagnation in a cadre or in an isolated post, it has been decided togrant two financial upgradations under the ACP Scheme to Group ‘B’,‘C’ and ‘D’ employees on completion of 12 and 24 years of regularservice. As per ACP Scheme, isolated post in Group ‘A’, ‘B’, ‘C’ and‘D’ cadres which have no promotional avenues also qualify for similarHbenefits. The financial upgradations under the ACP Scheme is placement in the higher Pay Scale and financial benefits in the higher Pay Scalewithout regular promotion. Under the financial upgradation, grant offinancial benefits under the ACP Scheme to the government servantsconcerned is on personal basis. Such financial upgradation neitheramounts to regular promotion nor require creation of new post. Some ofthe salient features of the ACP Scheme are as follows:- •The ACP Scheme envisages merely placement in the higherpay-scale/grant of financial benefits (through financialupgradation) only to the Government servant concerned onpersonal basis and shall, therefore, neither amount to functional/regular promotion nor would require creation of new posts forthe purpose; •Under the ACP Scheme, two financial upgradations shall beallowed to Group ‘B’, ‘C’ and ‘D’ employees on completion of12 years and 24 years of his/her regular service.

•As per para 5.1 of Annexure-1 – conditions for grant of benefitsunder the ACP Scheme, it is stipulated that two financialupgradations would be available only if no regular promotionduring the prescribed period (12 and 24 years) was granted toan employee. If an employee has already received one regularpromotion, he/she would qualify for second ACP only oncompletion of 24 years of regular service. However, in case iftwo regular promotions have been received by an employee,no further benefit under the ACP Scheme would accrue infavour of the employee.

•As per para 3.1 of the Office Memorandum dated 09.08.1999,the grant of financial upgradations under the ACP Scheme shallbe subject to the conditions mentioned in the Annexure-Iannexed thereon to the Office Memorandum dated 09.08.1999.

7. Para No.8 of the Annexure provides that the financialupgradations shall be purely personal to the employee and would haveno relevance to his/her seniority position. In other words, there would beno additional financial upgradations for the senior employee on the groundthat the junior employee has got the higher pay scale under the ACPScheme. Para No.12 of Annexure-I provides that the ACP Schemecontemplates merely placement on personal basis in the higher pay scale/grant of financial benefits only and shall not amount to actual functional A

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Apromotion of the employees concerned. We may usefully refer to therelevant features of the ACP Scheme as stipulated in Annexure-I to theOffice Memorandum dated 09.08.1999-Conditions for Grant of Benefitsunder the ACP Scheme, which reads as under:- Conditions for grant of benefits under the ACP Scheme:-B

1. The ACP Scheme envisages merely placement in the higherpay-scale/grant of financial benefits (through financialupgradation) only to the Government servant concerned onpersonal basis and shall, therefore, neither amount tofunctional/regular promotion nor would require creation ofCnew posts for the purpose;

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4. The first financial upgradation under the ACP Scheme shallbe allowed after 12 years of regular service and the secondupgradation after 12 years of regular service from the dateDof the first financial upgradation subject to fulfilment ofprescribed conditions. In other words, if the first upgradationgets postponed on account of the employee not found fit ordue to departmental proceedings, etc. this would haveconsequential effect on the second upgradation which wouldEalso get deferred accordingly;

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8. The financial upgradation under the ACP Scheme shall bepurely personal to the employee and shall have no relevanceto his seniority position. As such, there shall be no additionalFfinancial upgradation for the senior employee on the groundthat the junior employee in the grade has got higher pay-scale under the ACP Scheme;

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12. The proposed ACP Scheme contemplates merely placementGon personal basisin the higher pay-scale/grant of financialbenefits only and shall not amount to actual/functionalpromotion of the employees concerned. Since ordersregarding reservation in promotion are applicable only in thecase of regular promotion, reservation orders/roster shall notH

apply to the ACP Scheme which shall extend its benefitsuniformly to all eligible SC/ST employees also. However, atthe time of regular/functional (actual) promotion, the CadreControlling Authorities shall ensure that all reservation ordersare applied strictly;

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8. ACP Scheme was replaced by Modified Assured CareerProgression (MACP) Scheme which became operational with effectfrom 01.09.2008. The Sixth Central Pay Commission has recommendedthe adoption of MACP Scheme primarily to rectify the problems arisingfrom inter-departmental disparities:-

(i) ACP Scheme led to creation of certain disparities within theemployees in different organisations/departments who weredirectly recruited in the same pay scale who received differentfinancial upgradations under the ACP Scheme because ofexistence of different promotional hierarchical structure anddifferent promotional pay scales in different organisations/departments;

(ii) Another adverse consequence in the implementation of theACP Scheme was that the benefit of a higher pay scale wasnot available if the next post in the hierarchy also existed inthe identical pay scale.

9. In order to bring systematic changes in the existing scheme of

ACP so that all employees irrespective of existing hierarchical structurein their organisations/cadre get the same benefit, MACP wasrecommended by the Sixth Central Pay Commission which was acceptedby the Government with certain modifications vide its OfficeMemorandum dated 19.05.2009. Under the Sixth Central PayCommission, revised pay structure has been implemented with effectfrom 01.01.2006; whereas benefits of ACP Scheme have been allowedtill 31.08.2008. Vide Office Memorandum dated 19.05.2009, theGovernment of India introduced the MACP Scheme, in supersession ofthe ACP Scheme w.e.f. 01.09.2008. There shall be no change in distinction,classification or higher status on grant of financial upgradation underMACP as the upgradation is purely personal and merely placement inthe next higher Grade Pay.

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AModified Assured Career Progression (MACP) Scheme:-

10. Under the MACP Scheme, three financial upgradations aremade available in the next grade pay to an employee who has completed10, 20 and 30 years of regular service in the same post without gettingany promotion. The benefit would be available at the next higher gradeBpay. Some of the salient features of the MACP Scheme are as follows:- •Para No.2 of the MACP Scheme provides that the “MACPScheme envisages merely placement in the immediatenext higher grade payin the hierarchy of therecommended revised pay bands and grade pay”.C•

•As per para No.10 of the MACP Scheme – OfficeMemorandum dated 19.05.2009, no stepping up of pay inthe pay band or grade pay would be admissible with regardto junior getting more pay than the senior on account of payfixation under the MACP Scheme.

D•As per para No.11 of the said memorandum dated 19.05.2009,the differences in pay scales on account of financialupgradations under the ACP Scheme and MACP Schemewould not be construed as anomaly.

11. Para (19) of MACP Scheme contemplates merely placementEon personal basis in the immediate higher grade pay/grant of financialbenefits only and shall not amount to actual/functional promotion of theemployees concerned. As per para (20) of the MACP Scheme, financialupgradations shall be purely personal to the employee and shall have norelevance to the seniority position. As such, there shall be no additionalFfinancial upgradation for the senior employees on the ground that thejunior employees in the grade have received higher grade pay underMACP Scheme. We may usefully extract the relevant portion ofAnnexure-I of the Office Memorandum dated 19.05.2009, which readsas under:- ANNEXURE-I

GMODIFIED ASSURED CAREER PROGRESSIONSCHEME (MACPS)

1. There shall be three financial upgradation s under theMACPS, counted from the direct entry grade on completionHof 10, 20 and 30 years service respectively. Financial

upgradation under the Scheme will be admissible whenevera person has spent 10 years continuously in the same grade-pay.

2. The MACPS envisages merely placement in the immediatenext higher grade pay in the hierarchy of therecommended revised pay bands and grade pay as given inSection 1, Part-A of the first schedule of the CCS (RevisedPay) Rules, 2008. Thus, the grade pay at the time offinancial upgradation under the MACPS can, in certaincases where regular promotion is not between twosuccessive grades, be different than what is available atthe time of regular promotion. ln such cases, the highergrade pay attached to the next promotion post in thehierarchy of the concerned cadre/organisation will begiven only at the time of regular promotion.

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17. The financial upgradation would be on non-functional basissubject to fitness, in the hierarchy of grade pay within thePB-1.Thereafter for upgradation under the MACPS thebenchmark of ‘good’ would be applicable till the grade payof Rs. 6600/- in PB-3. The benchmark will be ‘Very Good’for financial upgradation to the grade pay of Rs. 7600 andabove.

19. The MACPS contemplates merely placement on personalbasis in the immediate higher Grade pay /grant offinancial benefits only and shall not amount to actualfunctional promotion of the employees concerned.Therefore, no reservation orders/roster shall apply to theMACPS, which shall extend its benefits uniformly to alleligible SC/ST employees also. However, the rules ofreservation in promotion shall be ensured at the time ofregular promotion. For this reason, it shall not be mandatoryto associate members of SC/ST in the Screening Committeemeant to consider cases for grant of financial upgradationunder the Scheme.

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A25.lf a regular promotion has been offered but was refused bythe employee before becoming entitled to a financialupgradation, no financial upgradation shall be allowed assuch an employee has not been stagnated due to lack ofopportunities. If, however, financial upgradation has beenallowed due to stagnation and the employees subsequentlyBrefuse the promotion, it shall not be a ground to withdrawthe financial upgradation. He shall, however, not be eligibleto be considered for further financial upgradation till heagrees to be considered for promotion again and the secondthe next financial upgradation shall also be deferred to theCextent of period of debarment due to the refusal.

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12. Clause 28 contains illustrations as to grant of financialupgradation under MACP. The illustrations in Clause 28 of the Schemecan easily be understood by referring to the First Schedule, Part-A ofDSection 1 of Central Civil Services (Revised Pay) Rules, 2008 whichgives a comparison of the scale of pay under the 5[th] Pay Commissionand the 6[th] Pay Commission as under:- THE FIRST SCHEDULE

(SEE RULES 3 & 4)

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PART – A

SECTION I

Revised Pay Bands and Grade Pays for posts carrying presentscales in Group ‘A’, ‘B’, ‘C’ & ‘D’ except posts for which differentFrevised scales are notified separately.

Comparison of ACP and MACP Scheme:-

13. For grant of financial upgradation under ACP Scheme, aScreening Committee shall be constituted for the purpose of processingthe cases for grant of benefits under the ACP Scheme. In terms ofClause 6.2 of the ACP Scheme, the composition of the ScreeningCommittee shall be the same as that of Departmental PromotionCommittee (DPC) prescribed under the relevant recruitment/service rulesfor regular promotion to the higher grade to which financial upgradationis to be granted. The requirement that the composition of the ScreeningCommittee shall be the same as that of DPC, under ACP Scheme, theconsideration for financial upgradations are stringent and the governmentservant has to satisfy the norms for promotion. Fulfilment of normalpromotional norms like benchmark, departmental examination, seniority-cum-fitness (in case of Group ‘D’ employees) are the requirement forgrant of financial upgradation under ACP Scheme.

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A14. Per contra, under the MACP Scheme, financial upgradationis granted in the next higher Grade Pay in the hierarchy of therecommended Pay Bands and Grade Pay as given in Section-1, Part-Aof the First Schedule of CCS (Revised Pay) Rules, 2008. Under theMACP Scheme, the financial upgradation would be on non-functionalbasis subject to fitness in the hierarchy of Grade Pay. MACP SchemeBcontemplates merely placement on personal basis in the immediatehigher Grade Pay/grant of financial benefits only and shall not amountto actual/functional promotion of the employees concerned (vide para(19) of the MACP Scheme). In terms of para (20) of MACP Scheme,financial upgradation under the MACP Scheme shall be purely personalCto the employees and shall have no relevance to the seniority position.As such there shall be no additional financial upgradation for the senioremployees on the ground that the junior employee in the grade has gothigher pay/higher Grade Pay under MACP Scheme (vide para (20) ofthe MACP Scheme).

15. The distinction between the ACP Scheme and MACP SchemeDcan be well understood by reference to the Pay Scale under the FifthCentral Pay Commission and the revised pay structure under the SixthCentral Pay Commission and the corresponding Grade Pay thereon asstated in Section-1, Part-A of the First Schedule of CCS (Revised Pay)Rules, 2008.E

THE FIRST SCHEDULE

(SEE RULES 3 & 4)

PART – ASECTION I

FRevised Pay Bands and Grade Pays for posts carrying presentscales in Group ‘A’, ‘B’, ‘C’ & ‘D’ except posts for which differentrevised scales are notified separately.

Present ScaleRevised Pay StructureSl.No. Post/GrPresent Scale Name of Corresponding Correspondinade Pay Pay g Grade Pay Band/Scale Bands/Scales (1)(2)(3)(4)(5)(6)G5.S-42750-70-3800-75-4400PB-15200-2020018006.S-53050-75-3950-80-4590PB-15200-2020019007. S-6 3200-85-4900 PB-1 5200-20200 2000 8. S-74000-100-6000PB-15200-2020024009.S-84500-125-7000PB-15200-20200280010.S-95000-150-8000PB-29300-34800420011.S-105500-175-9000PB-29300-34800420012.S-116500-200-6900PB-29300-34800420013.S-126500-200-10500PB-29300-348004200H14.15.SS--131474507500--225250--1150012000PBPB--2293009300--348003480046004800

16. Upon implementation of the Sixth Central Pay Commission,the Pay Scale of 3050-75-3950-80-4590 was kept in Pay Band-1 i.e.Rs.5200-20200 with Grade Pay of Rs.1900/-. Likewise, the Pay Scaleof 3200-85-4900 was kept in Pay Band-1 i.e. 5200-20200 with GradePay of Rs.2000/-. Pay Scale of Upper Division Clerk 4000-100-6000was also kept in the same Pay Band-1 i.e. 5200-20200 but with GradePay of Rs.2400/-. Under the ACP Scheme, the Government employeewho was working as Lower Division Clerk in the Pay Scale of 3050-75-3950-80-4590, on completion of 12 years of service, would be entitled tothe financial upgradation in the next promotional hierarchy i.e. in thecadre of UDC i.e. Pay Scale of4000-100-6000 while working in thesame capacity as LDC. Whereas under the MACP Scheme, theGovernment servant who is Lower Division Clerk in the Pay Band-1 i.e.Rs.5200-20200/- with Grade Pay of Rs.1900/-, on completion of 10 yearsof service upon grant of financial upgradation, would be getting theimmediate next higher Grade Pay of Rs.2000/- and not the grade pay onpromotional hierarchy. Following the erstwhile ACP Scheme (as perwhich financial upgradation was granted in promotional hierarchy), therespondents are claiming the benefit of Grade Pay of Rs.4200/- (whichis in the next promotional hierarchy). While the respondents are grantedfinancial upgradations as per the prevailing rules of MACP Scheme,they can only claim the immediate next higher Grade Pay and not theGrade Pay in the next promotional hierarchy.

17. As noted above, under the Sixth Pay Commission, scales ofpay of various hierarchies namely Lower Division Clerk and UpperDivision Clerk are all placed in the Pay Band-I i.e. Rs.5200-20200, ofcourse with different Grade Pay. When the respondents are enjoyingthe benefit of the Sixth Pay Commission by getting higher pay scale,they should go by the Scheme in accepting what it gives on the financialupgradation; but the respondents are claiming the best of the benefitsfrom both the ACP and MACP Schemes. The respondents have alreadybeen granted the beneficial pay upgradation as per the prevailing rulesof MACP Scheme on the recommendation of the Sixth Central PayCommission. The previous ACP Scheme was withdrawn and supersededby MACP Scheme with effect from 01.09.2008 based on therecommendation of the Sixth Central Pay Commission. Under MACPScheme, the respondent can only claim immediate next Grade Pay andnot the corresponding Grade Pay in promotional hierarchy.

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A18. As discussed earlier, in the ACP Scheme, there was no GradePay but only fixed Pay Scales and fixed increments were there. Afterthe Sixth Central Pay Commission, various Pay Scales have been clubbedtogether and there is revised Pay Scale with corresponding Pay Bandsand corresponding Grade Pay. As discussed earlier, the norms for grantof ACP were stringent and the government servant has to satisfy theBnorms for promotion. Whereas under the MACP Scheme, for financialupgradation, the rigour of screening is diluted. For upgradation under theMACP Scheme, the benchmark of “Good” would be applicable till theGrade Pay of Rs.6600/- in Pay Band-3. The benchmark will be “VeryGood” for financial upgradation to the Grade Pay of Rs.7600/- and above.

CContentions:-

19. Ms. Madhvi Divan, learned ASG appearing on behalf of Unionof India has taken us through the salient features of both ACP and MACPschemes and submitted that ACP and MACP schemes shall be subjectto the conditions mentioned thereon. Learned ASG has submitted thatDSixth Central Pay Commission took the view that ACP led to disparitieswithin the employees in different organisations/departments andrecommended adoption of the modified scheme which was accepted bythe Government and Sixth Central Pay Commission and MACP schemeare being implemented. It was submitted that under the ACP scheme,Ethe employee is entitled to financial upgradations (two times – oncompletion of 12 and 24 years of regular service) as per promotionalhierarchy. Whereas under the MACP scheme, the financial upgradations(three times – on completion of 10, 20 and 30 years of regular service)are fixed on the basis of immediate next grade pay and therefore, ACPand MACP schemes are significantly different in terms of the effectFand benefit to the employees. Learned ASG submitted that the previousACP scheme was withdrawn and it is superseded by the MACP schemew.e.f. 01.09.2008 and the respondents while enjoying the benefits ofrevised pay structure under the Sixth Central Pay Commission, cannotcherry-pick the benefit of financial upgradation in the next promotionalGhierarchy under the erstwhile ACP scheme. Learned ASG has furthersubmitted that it is the prerogative of the Government to provide anyfinancial benefit to its employees and so long as such scheme is notdiscriminatory or arbitrary, the Court may not interfere with schemes ofGovernment fixing pay scales and granting incentives.

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20. Mr. Vinay Kumar Garg, learned Senior counsel appearing onbehalf of some respondents has submitted that pay band includes a bracketof erstwhile pay scale and the grade pay and the concept of grade pay isa fitment benefit applicable to different pay. Learned Senior counselsubmitted that when a person is to be given benefit, pay, allowance orupgradation of the pay has to be given and in such a case, the upgradationhas to be in the next hierarchy of promotional position i.e. grade pay inthe next promotional position. It was submitted that pay, allowance andfinancial upgradation granted to the employees are the “conditions ofservice” and the same cannot be altered at the will of the employer-Government. Learned Senior counsel further submitted that MACPscheme envisages merely placement in the immediate next higher gradepay and the word “hierarchy” cannot be dissected from the “recruitment”and “conditions of service”. It was submitted that as per Rule 3(7) ofCentral Civil Services (Revised Pay) Rules, 2008, “revised paystructure” in relation to any post specified in column (2) of the FirstSchedule means the pay band and grade pay specified against thatpost or the pay scale specified in column (5) and (6) thereof. It wassubmitted that while granting financial upgradation under MACP scheme,the same has to be in the “higher grade pay in the next promotionalhierarchy and not merely in the hierarchy of grade pay”.

21. Mr. Jaideep Gupta, learned amicus assisted by Kunal Chatterjisubmitted that the object and purpose of the 1999 ACP was to mitigatehardship in case of acute stagnation either in a cadre or in an isolatedpost and MACP scheme of 2009 is also for the same purpose and grantof financial upgradation under MACP scheme is only continuation of theexisting scheme with certain modifications. Learned amicus furthersubmitted financial upgradation which is granted under the ACP andMACP both involve fixation/refixation of pay and allowance whichbecome the basis of the fixation of pay and allowances for the rest ofthe career of the employee concerned and such financial upgradation isnot merely a special allowance which can be granted or taken back atthe will of the employer. Learned amicus has submitted that MACPscheme linked to the grade pay should not be taken into considerationand MACP scheme should be interpreted to mean that financialupgradation has to be granted to the grade pay of the next promotionalpost and not to the next grade pay in the Schedule I to the CCS (Revisionof Pay) Rules. Learned amicus urged the Court to adopt a purposiveinterpretation of the MACP scheme to grant financial upgradation in the AB

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Anext promotional hierarchy as in the erstwhile ACP scheme. It wascontended that if financial upgradation is granted in the hierarchy ofgrade pay then MACP scheme would lead to a discriminatory treatmentviolating Article 14 of the Constitution of India. In this regard, learnedamicus has drawn the attention of the Court to the discussion of theJoint Committee of MACP scheme held under the Chairmanship of theBJoint Secretary (E) of the Department of Personnel and Training on06.10.2010.

22. Mr. C.K. Sasi, learned counsel appearing for the respondentsin SLP(C) No.21803 of 2014 and SLP(C) No.29605 of 2017 has submittedthat when the Pay Commission and incentive scheme is introduced, theCemployee’s interest has to be kept in view and the same cannot bedisadvantageous to the employees when compared to the erstwhilescheme. In support of his contention, learned counsel has drawn ourattention to the comparative chart which he has filed along with hiswritten submission.D

23. Reiterating the submissions of learned amicus and the othersubmissions, Ms. Prabha Swami, learned counsel appearing for therespondents in SLP(C) No.31125 of 2016 has taken us through the factsand submitted that if the ACP had been continued after the completionof twenty-four years of service, respondents (SLP(C) No.31125 of 2016)Ewould have been in the grade pay of Rs.5400/- in Pay Band-3 whereasdue to MACP, the respondents were placed in grade pay of Rs.4600/- inPay Band-2 and this has caused discrimination and financial hardship tothe respondents. Learned counsel has also drawn our attention to thecomparative chart and submitted that MACP scheme has operated tothe disadvantage of the respondents.F

24. Mr. M.K. Bhardwaj, learned counsel representing theintervenors has drawn our attention to the Record Note of the meetingof the Joint Committee on MACP scheme held under the Chairmanshipof the Joint Secretary, DOP&T on 15.09.2010 and submitted that theCommittee had taken note of various anomalies and also as to how theGimplementation of MACP has resulted as a disadvantage to theGovernment servants. Mr. Bhardwaj has drawn our attention to variousanomalies noted by the Committee and submitted that in Raj Pal’s case,the Record Note of the third meeting of MACP scheme held on 15.03.2011was taken note by the High Court and the High Court rightly held thatHRaj Pal is entitled to financial upgradation in the grade pay based on the next promotional hierarchy. It was submitted that if the financialupgradation is to be granted on the basis of next grade pay, it would begreatly disadvantageous to the employees.

Discussion and findings:-

25. Though various contentions have been raised assailing theMACP Scheme viz. “financial upgradation in the next Grade Pay”and “no stepping up of pay on the ground that junior getting morepay”, be it noted that the clauses of the MACP Scheme including theclause providing the financial upgradation in the next Grade Pay havenot been challenged by the respondents. In the impugned judgments, theTribunals/High Courts have only relied upon Raj Pal’s case and not goneinto the MACP Scheme vis-à-vis erstwhile ACP Scheme and also notconsidered the merits of the contention of the respondents. We havetherefore, considered the MACP Scheme vis-à-vis erstwhile ACPScheme in the light of the contentions raised by the respondent.

26. As pointed out earlier, both ACP and MACP Schemes are inthe nature of incentive schemes devised with the object of ensuring thatthe employees who are unable to avail of adequate promotionalopportunities, get some relief from stagnation in the form of financialbenefits. Under the MACP Scheme, financial upgradations are grantedat three regular intervals on completion of 10-20-30 years of servicewithout promotion. Hence, it is also intended to ensure that the employeesare adequately incentivised to work efficiently despite not gettingpromotion for want of promotional avenue. The change in policy broughtabout by supersession of the ACP Scheme with the MACP Scheme isafter well-deliberated and well-documented recommendations of the SixthCentral Pay Commission. Considering the various issues in theimplementation of the ACP Scheme, the Pay Commission expressed itsviews “the only other way is to bring systematic changes in the existingScheme of ACP so that all the employees irrespective of the existinghierarchy structure in their organisations/cadres, get some benefit underit”. The Commission therefore, recommended that the existing Schemeof ACP be continued with the modifications indicated thereon in theReport that the financial upgradation has to be in the next immediateGrade Pay. One of the reasons for the expert body recommending theMACP Scheme was that there were inter-departmental disparities whereseveral departments had varying promotional hierarchies. As a result,the working of ACP Scheme under which an employee who stagnated A

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Afor 12 years, was entitled to pay in the Pay Scale of the next promotionalpost, led to inter-departmental anomalies. The Pay Commission therefore,recommended MACP Scheme with a view to putting an end to the problemensuing from inter-departmental disparities.

27. The learned amicus and the learned counsel appearing forBthe respondents urged the court to adopt a “purposive interpretation”that the words “immediate next higher Grade Pay” to be interpreted as“Grade Pay of the next promotional post” in the hierarchy. MACP Schemeenvisages merely placement in the immediate next higher Grade Pay.By perusal of the MACP Scheme extracted earlier, it is seen that thewords used in the Scheme are “placement in the immediate next higherCGrade Pay in the hierarchy of the recommended revised pay bands”.The term “Grade Pay in the next promotional post” is conspicuouslyabsent in the entire body of the MACP Scheme. The argument of therespondents that the benefit of MACP Scheme is referable to thepromotional post, is de hors the MACP Scheme and cannot be accepted.DThough ACP and MACP Schemes are intended to provide relief againststagnation, both the Schemes have different features. Pay scales underthe Sixth Pay Commission and the MACP Scheme are stated to bemore beneficial since it extends to the employees with time intervalswith higher pay bands and various facilities which were not availableunder the ACP Scheme including the three financial upgradations in shorterEtime span. In any event, MACP Scheme has not been challenged by therespondents. As rightly contended by the learned ASG, the respondentscannot be permitted to cherry-pick beneficial features from the erstwhileACP Scheme and also take advantage of the beneficial features in theMACP Scheme.F

28. The object behind the MACP Scheme is to provide relief againstthe stagnation. If the arguments of the respondents are to be accepted,they would be entitled to be paid in accordance with the grade pay offeredto a promotee; but yet not assume the responsibilities of a promotee. Assubmitted on behalf of Union of India, if the employees are entitled toGenjoy Grade Pay in the next promotional hierarchy, without thecommensurate responsibilities as a matter of routine, it would have anadverse impact on the efficiency of administration.

29. The change in policy brought about by supersession of ACPScheme with the MACP Scheme is after consideration of all theHdisparities and the representations of the employees. The Sixth Central

Pay Commission is an expert body which has comprehensively examinedall the issues and the representations as also the issue of stagnation andat the same time to promote efficiency in the functioning of thedepartments. MACP Scheme has been introduced on therecommendation of the Sixth Central Pay Commission which has beenaccepted by the Government of India. After accepting therecommendation of the Sixth Central Pay Commission, the ACP Schemewas withdrawn and the same was superseded by the MACP Schemewith effect from 01.09.2008. This is not some random exercise which isunilaterally done by the Government, rather, it is based on the opinion ofthe expert body – Sixth Central Pay Commission which has examinedall the issues, various representations and disparities. Before making therecommendation for the Pay Scale/Revised Pay Scale, the PayCommission takes into consideration the existing pay structure, therepresentations of the government servants and various other factorsafter which the recommendations are made. When the expert body likePay Commission has comprehensively examined all the issues andrepresentations and also took note of inter-departmental disparities owingto varying promotional hierarchies, the court should not interfere withthe recommendations of the expert body. When the government hasaccepted the recommendation of the Pay Commission and has alsoimplemented those, any interference by the court would have a seriousimpact on the public exchequer.

30. Observing that it is the function of the Government whichnormally acts on the recommendations of the Pay Commission which isthe proper authority to decide upon the issues, in Union of India andanother v. P.V. Hariharan and another (1997) 3 SCC 568, it washeld as under:- “5. ….. It is the function of the Government which normally actson the recommendations of a Pay Commission. Change of payscale of a category has a cascading effect. Several other categoriessimilarly situated, as well as those situated above and below, putforward their claims on the basis of such change. The Tribunalshould realise that interfering with the prescribed pay scales is aserious matter. The Pay Commission, which goes into the problemat great depth and happens to have a full picture before it, is theproper authority to decide upon this issue. Very often, the doctrineof “equal pay for equal work” is also being misunderstood and AB

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Amisapplied, freely revising and enhancing the pay scales acrossthe board. We hope and trust that the Tribunals will exercise duerestraint in the matter. Unless a clear case of hostile discriminationis made out, there would be no justification for interfering with thefixation of pay scales. We have come across orders passed bySingle Members and that too quite often Administrative Members,Ballowing such claims. These orders have a serious impact on thepublic exchequer too. It would be in the fitness of things if allmatters relating to pay scales, i.e., matters asking for a higher payscale or an enhanced pay scale, as the case may be, on one or theother ground, are heard by a Bench comprising at least one JudicialCMember. ….”31. Observing that the decision of expert bodies like the PayCommission is not ordinarily subject to judicial review, in State of U.P.and Others v. U.P. Sales Tax Officers Grade II Association (2003)6 SCC 250, the Supreme Court held as under:-D“11. There can be no denial of the legal position that decision ofexpert bodies like the Pay Commission is not ordinarily subject tojudicial review obviously because pay fixation is an exerciserequiring going into various aspects of the posts held in variousservices and nature of the duties of the employees…...”.

E32. In Secretary, Government (NCT of Delhi) and others v.Grade-1 Officers Association and others (2014) 13 SCC 296, theSupreme Court refused to interfere with the ACP Scheme as it wouldviolate government policy and since exercise of judicial review wouldnot be proper, upheld the ACP Scheme and the conditions therein.F33. In

33. In State of Tamil Nadu v. S. Arumugham (1998) 2 SCC198, the Supreme Court has observed that the government has the rightto frame a policy to ensure efficiency and proper administration and toprovide to suitable avenues for promotion to officers working in differentdepartment. The Supreme Court has further observed that the TribunalGcannot substitute its own views for the views of the government or directnew policy based on the views of Tribunal.

34. Observing that fixation of pay and determination ofresponsibilities is a complex matter which is for the executive to take adecision, the courts should approach such matters with restraint, in Stateof Haryana and Another v. Haryana Civil Secretariat Personal StaffHAssociation (2002) 6 SCC 72, the Supreme Court held as under:- “10. It is to be kept in mind that the claim of equal pay for equalwork is not a fundamental right vested in any employee though itis a constitutional goal to be achieved by the Government. Fixationof pay and determination of parity in duties and responsibilities isa complex matter which is for the executive to discharge. Whiletaking a decision in the matter, several relevant factors, some ofwhich have been noted by this Court in the decided case, are tobe considered keeping in view the prevailing financial positionand capacity of the State Government to bear the additional liabilityof a revised scale of pay……… That is not to say that the matteris not justiciable or that the courts cannot entertain any proceedingagainst such administrative decision taken by the Government.The courts should approach such matters with restraint andinterfere only when they are satisfied that the decision of theGovernment is patently irrational, unjust and prejudicial to a sectionof employees and the Government while taking the decision hasignored factors which are material and relevant for a decision inthe matter. Even in a case where the court holds the order passedby the Government to be unsustainable then ordinarily a directionshould be given to the State Government or the authority takingthe decision to reconsider the matter and pass a proper order.The court should avoid giving a declaration granting a particularscale of pay and compelling the Government to implement thesame……”. [Underlining added]

35. The prescription of Pay Scales and incentives are matterswhere decision is taken by the Government based upon therecommendation of the expert bodies like Pay Commission and severalrelevant factors including financial implication and court cannot substituteits views. As held in Haryana Civil Secretariat Personal StaffAssociation (2002) 6 SCC 72, the court should approach such matterswith restraint and interfere only when the court is satisfied that the decisionof the Government is arbitrary. Even in a case where the court takes theview that order/Scheme passed by the Government is not an equitableone, ordinarily only a direction could be given to the State Governmentor the authority for consideration of the matter and take a decision. Inthe present batch of cases where the respondents are claiming financialupgradation in the grade pay of promotional hierarchy, no grounds aremade out to show that the MACP Scheme granting financial upgradationin the next grade pay is arbitrary and unjust; warranting interference.

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AThe implementation of the MACP Scheme is claimed to have led tocertain anomalies; but as pointed out earlier, MACP Scheme itself is notunder challenge.

36. Raj Pal’s Case – Whether could have been taken as aprecedent:- In almost all the cases, the High Courts have relied uponBRaj Pal’s case only on the basis that Raj Pal’s case was dismissed bythe Supreme Court. Even at the outset, it is to be pointed out that RajPal’s case, SLP (C) No. ……CC 7467 of 2013 was dismissed by theSupreme Court vide order dated 15.04.2013 on the ground that therewas no sufficient explanation to condone the delay in refiling the SpecialLeave Petition which is a default in the manner in which the case wasCprosecuted and not a dismissal on merits. Be that as it may, since variousHigh Courts have relied upon Raj Pal’s case, it is necessary to refer tothe facts, findings thereon and whether it could have been followed asprecedent.

37. Raj Pal was working in the post of Photocopier w.e.f.D12.10.1986 in the pay scale of Rs.3050-4590/- in the CentralAdministrative Tribunal, Chandigarh Bench, Chandigarh. The post ofPhotocopier is an isolated post. Upon introduction of the ACP Schemein the year 1999, on completion of twelve years of regular service, RajPal was granted the next higher scale in the hierarchy of pay scales i.e.ERs.3200-4590/- vide order dated 12.10.1999. At that point of time, RajPal claimed parity with other posts like Hindi Typist/LDC which wasalso in the equivalent pay scale of Rs.3050-4590/- and had been placedin the scale of Rs.4000-6000/- on the grant of 1[st] financial step up oncompletion of twelve years of regular service. He also claimed that oncompletion of twenty-four years of regular service in second financialFstep up, he should be placed in the scale of Rs.5500-9000/-. In the earlierround of litigation, Raj Pal filed O.A. No.278/CH/2004 claiming theaforesaid parity with posts like Hindi Typist/LDC and the same wasallowed by Central Administrative Tribunal by its order dated 30.08.2004whereby Raj Pal was held entitled to the benefit of higher pay scaleGunder the ACP Scheme of 1999 as applicable for the similar posts i.e.Hindi Typist/LDC. The order dated 30.08.2004 was challenged by Unionof India before the High Court in CWP No.7356/CAT of 2005 and thesame was dismissed vide order dated 23.05.2007.

38. For proper appreciation of Raj Pal’s case, we may refer toHthe relevant scales of pay with revised Pay Bands, which are as under:-

Upon implementation of the Sixth Central Pay Commission, the scale ofRs.3050-4590/- was kept in PB-1-Rs.5200-20200/- with grade pay ofRs.1900/-. The scale of Rs.4000-6000/- was also kept in PB-1 withgrade pay of Rs.2400/-. The scale of Rs.5500-9000/- was kept in PB-2-Rs.9300-34800/- with grade pay of Rs.4200/-. In terms of MACPScheme, by the order dated 09.08.2010, Raj Pal was granted secondfinancial upgradation in the PB-1 of Rs.5200-20200/- with grade pay ofRs.2400/-.

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39. Raj Pal filed OA No. 1038/CH/2010 before CAT contendingthat his pay has been wrongly fixed in PB-1 in the scale of Rs.5200-20200/- with Grade Pay of Rs. 2400/-. He claimed that he was entitledto be fixed in PB-2 in the scale of Rs.9300-34800/- with Grade Pay ofRs. 4600/-. Raj Pal relied on para (6) of the MACP Scheme as perwhich in case of employees granted financial upgradations under ACPScheme till 01.01.2006, their revised pay will be fixed with reference tothe pay scale granted to them under ACP. The Tribunal vide its orderdated 31.05.2011 noted that it is not disputed that the post held by RajPal has been declared equivalent to the post of LDC/Hindi Typist etc.by the Tribunal as well as the High Court in matters of grant of ACP andthese pronouncements have attained finality and also stood implemented.The OA was allowed and the appellants were directed to grant secondfinancial upgradation in the promotional hierarchy in PB-2 in the scale ofRs.9300-34,800/- with Grade Pay of Rs.4,200/- to Raj Pal under theMACP from due date and fix his pay in the hierarchy of posts decided inhis case earlier. The appellants filed CWP No.19387 of 2011 before theHigh Court assailing the aforesaid order. It was inter alia contended bythe appellants that the earlier ACP Scheme stood superseded by theMACP scheme and both the schemes cannot run concurrently. The saidwrit petition was dismissed by the High Court.

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A40. The above judgment of the High Court was challenged in theSupreme Court by filing SLP (C) No. ….CC 7467 of 2013. The SLPwas filed on 24.12.2011; but some defects were observed by the CourtRegistry and returned for rectification whereafter the SLP was refiledonly on 21.03.2013. The SLP was dismissed by the Hon’ble ChamberJudge vide order dated 15.04.2013 on the ground that sufficientBexplanation has not been given to condone the delay in refiling the SLP.

41. Insofar as Raj Pal’s case is concerned, in view of the dismissalof the earlier writ petition i.e. CWP No.7356/CAT of 2005, PrincipalBench of the Tribunal issued letter dated 02.08.2007 directing all theBenches of the Tribunal that the Photocopiers working in the respectiveCBenches may be granted 1[st] financial upgradation under ACP Schemein the scale of pay of Rs.4000-6000/- and 2[nd] financial upgradation in thescale of Rs.5500-9000/-. In Raj Pal’s case, taking note of the earlierround of litigation i.e. O.A.No.278/CH/2004 and CWP No.7356/CAT of2005 and the letter sent by the Principal Bench of the Tribunal datedD02.08.2007 in its order dated 31.05.2011 in O.A. No. 1038/CH/2010, theTribunal held that Raj Pal having been placed under ACP scheme –second financial upgradation in the scale of Rs.5500-9000/- is entitled toPB-2 (Rs.9300-34800/- with grade pay of Rs.4200/-). The relevantfindings of the Tribunal in O.A. No.1038/CH/2010 read as under:- E“4. The respondents took the matter to Punjab and Haryana HighCourt by way of filing a CWP No.7356 CAT of 2005. The CWPwas dismissed vide order dated 23.05.2007, holding the applicantentitled to the benefit of ACP at par with the LDC/Hindi Typist,etc. It was thereafter that the Principal Bench of the Tribunalissued letter dated 02.08.2007, directing all the Benches of theFTribunal that the Photocopiers working in respective Benches maybe granted 1stfinancial upgradation under ACP Scheme in thescale of pay of Rs.4000-6000 and 2ndfinancial upgradation in thescale of Rs.5500-9000.

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12. There is no dispute that the applicant is holding the post ofphotocopier, which is an isolated post, having no avenues forpromotion. It is also not disputed that, the post held by the applicanthad been declared equivalent to the post of LDC/Hindi Typist,etc. by the Tribunal as well as the High Court by judicial H

pronouncement in matters of grant of ACP, which have attainedfinality and stands implemented also. Accordingly, applicant wasgranted 1[st] ACP (under the old ACP) w.e.f. 09.08.1999 in the payscale of Rs.4000-6000.” [Underlining added]

42. It was on the above, the Tribunal held that the post ofPhotocopier being an isolated post and in view of the letter dated02.08.2007 sent by the Principal Bench and taking note of the earlierround of litigation, the Tribunal directed that Raj Pal be granted PB-2-Rs.9300-34800/- with grade pay of Rs.4200/-. In the case of Raj Pal,the post of Photocopier, being an isolated post, the order was passed inthe peculiar facts and circumstances of the case. Rajpal’s case did notgo into any details in respect of the overall features of the new MACPScheme and did not consider the recommendations of the expert bodywhich culminated in the new Scheme. The order passed in Raj Pal’scase could not have been taken as a precedent in other cases. This is allthe more so when SLP (C) No.….CC 7467 of 2013 was dismissed bythe Supreme Court on the ground of delay in refiling the Special LeavePetition and no decision was rendered on merits.

Dismissal of case by the Supreme Court on the ground ofdelay in filing/non-filing, is not a binding precedent:-

43. As noted above, SLP preferred by Union of India against theorder dated 19.10.2011 passed by the High Court was dismissed on theground that the delay in refiling has not been satisfactorily explained.The question which arises for consideration is when the SLP has beendismissed on the ground of delay in filing or of refiling (like in the case ofRaj Pal), whether it can be taken as a binding precedent on the merits ofthe case as the “law declared by the Supreme Court within the meaningof Article 141 of the Constitution of India”. Raj Pal’s case havingbeen dismissed on the ground that no sufficient cause was shown forthe delay in refiling, in our considered view, Raj Pal’s case ought not tohave been quoted as a precedent of this Court by the High Courts.

44. Article 141 of the Constitution of India provides that the lawdeclared by the Supreme Court shall be binding on all courts within theterritory of India, i.e. the pronouncement of the law on the point shalloperate as a binding precedent on all courts within India. Law declaredby the Supreme Court has to be essentially understood as a principle laiddown by the court and it is this principle which has the effect of a A

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Aprecedent. A principle as understood from the word itself is a propositionwhich can only be delivered after examination of the matter on merits. Itcan never be in a summary manner, much less be rendered in a decisiondelivered on technical grounds, without entering into the merits at all. Adecision, unaccompanied by reasons can never be said to be a lawdeclared by the Supreme Court though it will bind the parties inter-se inBdrawing the curtain on the litigation. In Union of India v. All IndiaService Pensioners’ Association and another (1988) 2 SCC 580,the Supreme Court held that “when reasons were made by the SupremeCourt for dismissing the SLP, the decision becomes one which attractsArticle 141 of the Constitution which provides that the law declaredCby the Supreme Court shall be binding on all the courts within theterritory of India……”.

45. Observing that when a Special Leave Petition is dismissed bya non-speaking order, by such dismissal, the Supreme Court does not laydown any law as envisaged under Article 141 of the Constitution ofDIndia in Supreme Court Employees Welfare Association v. Union ofIndia and Others (1989) 4 SCC 187, this Court held as under:- “22. ….It is now a well-settled principle of law that when a specialleave petition is summarily dismissed under Article 136 of theConstitution, by such dismissal this Court does not lay down anyElaw, as envisaged by Article 141 of the Constitution, as contendedby the learned Attorney General. In Indian Oil Corporation Ltd.v. State of Bihar (1986) 4 SCC 146 it has been held by this Court-that the dismissal of a special leave petition in limine by a nonspeaking order does not justify any inference that, by necessaryimplication, the contentions raised in the special leave petition onFthe merits of the case have been rejected by the Supreme Court.It has been further held that the effect of a non-speaking order ofdismissal of a special leave petition without anything moreindicating the grounds or reasons of its dismissal must, by necessaryimplication, be taken to be that the Supreme Court had decidedGonly that it was not a fit case where special leave petition shouldbe granted.In Union of India v. All India Services Pensioners’Association (1988) 2 SCC 580 this Court has given reasons fordismissing the special leave petition. When such reasons are given,the decision becomes one which attracts Article 141 of theConstitution which provides that the law declared by the Supreme H

Court shall be binding on all the courts within the territory of India.It, therefore, follows that when no reason is given, but a specialleave petition is dismissed simpliciter, it cannot be said that therehas been a declaration of law by this Court under Article 141 ofthe Constitution.” [underlining added]

Raj Pal’s case having been dismissed on the ground that nosufficient cause was shown for the delay in refiling, Raj Pal’s case oughtnot to have been quoted as precedent of this Court by the High Courts.

46. The learned counsel for the intervenors has referred to therecord note of the meetings of the Joint Committee of MACP held underthe chairmanship of JS(Establishment), DoP&T on 15.09.2010 and otherdates and drawn our attention to various items viz. Item No.1-Providefor Grade Pay of the Next Promotional Post under MACP; Item No.3-Option for Earlier ACP Scheme; Item No.8-Anomaly on Introduction ofMACP Scheme; and Item No.29 - Modification in MACP Scheme. Inresponse to the above submission, Union of India has filed additionalwritten submission referring to the decision in various meetings of theJoint Committee on MACP held on various dates.

47. 2[nd] Meeting of the Joint Committee dated 15.09.2010:-In the 2[nd] Meeting of the Joint Committee held on 15.09.2010, it wasdecided that organisations/cadres would be given the option to chooseeither the ACP Scheme or the MACP Scheme. It was also decided thatindividual options would not be permitted. Since the ACP and MACPScheme were fallback options for stagnating employees, it was thereforedecided that process of completing cadre restructuring in a time boundmanner would solve the problem of stagnation. It was further decidedthat cadre structure had to be reviewed periodically to harmonise thefunctional needs of the organisation and career progression of employees.(Vide copy of O.M. dated 10.02.2011).

48. 3[rd] Meeting of the Joint Committee dated 15.03.2011:-In the 3[rd] Meeting of the Joint Committee held on 15.03.2011, the staffside reiterated their demand that the MACP Scheme should be grantedin the promotional hierarchy of posts rather than in the grade payhierarchy. The official side had suggested that the Government waswilling to consider a revision in the MACP Scheme to the effect thatorganisations/cadres shall have the option to choose either the ACPScheme or the MACP Scheme. But the staff side stated that such a A

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Adispensation would not be practical and there was a need to exploreother alternatives to solve the issue. Therefore, it was agreed betweenthe staff side and the official side that there was no need to change thebasic structure of MACP Scheme, but there was a need to separatelyexamine those cases where MACP Scheme was less advantageousthan the ACP Scheme (Vide the Minutes of the 3[rd] Meeting of JointBCommittee dated 15.03.2011). Pursuant to the decision of the 3[rd] Meetingof Joint Committee, it was decided that the official side would write tothe Ministry of Railways, Defence, Urban Development, Home Affairsand the Department of Posts to forward information in respect of thespecific categories of employees where the MACP was lessCadvantageous than the erstwhile ACP Scheme. Accordingly, theseMinistries/Departments were requested to send specific cases wherein,it was less advantageous for employees under MACP Scheme ascompared to ACP Scheme. It is stated that no Ministry/Departmentother than Ministry of Urban Development had responded. (Vide Copyof Minutes dated 15.03.2011)D

49. Meeting of the Joint Committee dated 27.07.2012:- Inthe meeting of the Joint Committee held on 27.07.2012, the official sidestated that it was not possible to give individual options to the employeesto opt for erstwhile ACP Scheme in preference to MACP Scheme forEavailing the benefit of financial upgradation.

50. Letter dated 04.11.2013:- Pursuant to the Joint Committeemeeting held on 27.07.2012, a letter dated 04.11.2013 was sent to thestaff side making it clear that the solution lies in review of cadre structurein a time bound manner with a view to mitigate the problem of stagnationFas the benefit of Modified Assurance Career Progression Scheme havebeen granted as a fallback option in the event of promotions not takingplace in time. With regard to letter dated 04.11.2013 which relates onlyto Postal Department, it is clarified that in the Department of Posts, theerstwhile ACP Scheme was not operational for postal employees. Theseemployees were covered under Time Bound One Promotion (TBOP)/GBiennial Cadre Review (BCR) Schemes. The MACP Scheme for CentralGovernment employees is a continuation of ACP Scheme. Insofar asDepartment of Posts is concerned, it was decided by the Department ofPosts to adopt MACP Scheme in respect of postal employees also w.e.f.01.09.2008. Accordingly, O.M. No.4-7/(MACPS)/2009-PCC dated H

18.09.2009 was issued by Department of Posts to clarify that TBOP/BCR Schemes stand discontinued w.e.f. 01.09.2008 consequent uponintroduction of MACPS to postal employees w.e.f. 01.09.2008. The O.M.dated 1-20/2008-PCC dated 04.11.2013 was issued to regulate the fixationof pay in respect of postal employees during the period 01.01.2006 to31.08.2008 i.e. before the switch over to MACPS took place. It isstated that the O.M. dated 04.11.2013 was only in respect of postalemployees governed under TBOP/BCR and does not relate to CentralGovernment employees who were covered under erstwhile ACP Scheme.Therefore, this O.M. has no bearing on the issue in the said SLP pendingbefore Hon’ble Supreme Court of India.

51. The ACP Scheme which is now superseded by MACP Schemeis a matter of government policy. Interference with the recommendationsof the expert body like Pay Commission and its recommendations forthe MACP, would have serious impact on the public exchequer. Therecommendations of the Pay Commission for MACP Scheme has beenaccepted by the Government and implemented. There is nothing to showthat the Scheme is arbitrary or unjust warranting interference. Withoutconsidering the advantages in the MACP Scheme, the High Courts erredin interfering with the government’s policy in accepting therecommendations of the Sixth Central Pay Commission by simply placingreliance upon Raj Pal’s case. The impugned orders cannot be sustainedand are liable to be set aside.

52. In the result, all the impugned orders in these batch of appealsarising out of SLP(C) No.21803 of 2014, SLP(C) No.22181 of 2014,SLP(C) No.23335 of 2014, SLP(C) No.23333 of 2014, SLP(C) No.18227of 2015, SLP(C) No.31125 of 2016 and SLP(C) Diary No.6042 of 2017are set aside and the appeals preferred by the Union of India are allowed.Consequently, appeal arising out of SLP(C)No.33706 of 2016 is disposedof. No costs.

53. However, as pointed out earlier in para Nos. (47), (48) and(49), since certain anomalies on implementation of the MACP Schemehave been brought to the notice of the Joint Committee in the variousmeetings of the Joint Committee, Union of India and DoP&T to considerthe same as they deem it appropriate and take a decision in accordancewith law.

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884SUPREME COURT REPORTS[2020] 7 S.C.R.

A54. We record our appreciation for the valuable assistance renderedby Mr. Jaideep Gupta, learned amicus assisted by learned counsel Mr.Kunal Chatterjee.

Divya PandeyB

Appeals disposed of.

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